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Article

1 Dec 2008

Author:
Rob Foulkes & Daniel Litvin, Critical Resource

Resources slump: slash & burn?

[B]ig oil and mining companies…focused intently on cutting costs may be tempted to treat management of socio-political and sustainability issues as a luxury which they can live without while projects are on hold...In fact,...strategically protecting key relationships during this period actually may be more important to companies’ long term success than any short term cash savings...[W]ell-focused sustainable development programmes and other relationship-building activities – which typically cost a small fraction of overall capital expenditure for a project – may be a worthwhile investment...[A]t some point markets will recover and prices will pick up, and the way companies treat their hosts in the interim will not be forgotten. [refers to North, Rio Tinto, BP, ExxonMobil]